Poor immigration policy doesn't just keep people out of a country, it's also a bane to entrepreneurship in the country that tightens up its borders. That's what's happening in the United States, and other countries are taking advantage.

“Start-Up Chile” is the brainchild of Nicolas Shea, a Chilean businessman who had a brief stint in government. The programme selects promising young firms and gives their founders the equivalent of $40,000 and a year’s visa to come and work on their ideas in Chile. Since 2010, when Start-Up Chile started, some 500 companies and almost 900 entrepreneurs from a total of 37 countries have taken part. Start-Up Chile has doled out money to Chileans, too (see chart).

Mr. Shea says he was inspired by his experience in America, where he studied at Stanford University, a wellspring of high-tech start-ups. “I saw smart people being kicked out of the United States because they couldn’t get visas to stay,” he says. “And I thought: why not bring some of them to Chile?”

By the end of next year, the program is expected to have backed over 1,000 companies, costing $40 million -- a relatively small price to pay to establish a country as an entrepreneurial hub.

But it's not just global entrepreneurs that the program is attracting. Forty percent of the companies that applied for the latest round of startup funds were Chilean companies. Attracting bright minds while developing home-grown talent sounds like a winning combination.